Captive insurance industry – a major contributor to Cayman’s economy

On 2 September, 2011 the Insurance Managers Association of Cayman (IMAC) held its Annual General Meeting at The Ritz-Carlton, Grand Cayman.

The Executive Board of IMAC advised its membership that a recent study had been conducted that revealed that the Captive Insurance industry of Cayman contributed in excess of US$83m to Cayman’s economy annually.

For an industry employing fewer than 300 staff, this is a significant amount which is comprised of annual fees paid to the government from international clients of US$10m, fees paid to Caymanian services providers such as insurance managers, lawyers, auditors and bankers of $61m, and indirect revenue of $12m which relates to revenue generated from international clients visiting Cayman for director meetings and the Captive Forum.

This is made up of $8m spent in hotels, $2m spent in restaurants, and another $2m spent on flights, taxis, car hire, sight-seeing and other activities.

The cornerstone of IMAC’s objective is to host the premier captive forum which is hosted annually the end of November/beginning of December. In spite of the difficult economic climate, in 2010 the Cayman captive forum hosted over 1,040 attendees which is comprised by a significant of overseas visitors including chief executive officers, chief financial officers, risk managers, brokers, adjusters, lawyers and various other consultants.

This far exceeded the previous high water mark of 867 attendees in 2007 during better economic times causing the outgoing Chairperson Monique MacDonald to say” we are extremely pleased that the forum encouraged so many visitors to Cayman especially at the time of year when previously the Jazz Fest would usually be held”.

As of to date registrations for the 2011 Forum are already ahead of confirmations received at the same time last year. It was recently reported by a group of medical and healthcare professionals that the Cayman Forum is now, without doubt, “the premier captive event for the industry anywhere in the world”.

With the funds that IMAC earns from its annual membership fees, the Captive Forum and various fund raising events held during the course of the year, it has been able to make philanthropic donations to a number of local charities such as Cayman Hospice Care, the Cancer Society, the National Trust and the Women’s Resource Centre. In addition to these worthy causes, IMAC is also proud of its education scholarship fund.

Fig 1.0: from www.cimoney.com.ky: Statistics to 30 June 2011

The Educational Scholarship Trust Fund of the Insurance Managers’ Association of Cayman was formed in 1994 to assist with the post high school education of young Caymanians. Contributions are derived from IMAC, the individual insurance management firms and the captive insurance companies themselves.

Since its inception, the fund has raised over US$1.5 million. So far IMAC’s Education Scholarship Fund has helped over twenty Caymanian youngsters, with ten of these currently studying overseas. Full details of the fund, the students being sponsored and the courses they are following can be found on IMAC’s website: www.IMAC.ky.

IMAC is focused on current issues such as the impact of Solvency II on other jurisdictions, review of Cayman’s Segregated Cell Legislation, reaping opportunities from the Tax Information Exchange Agreements recently ratified with several countries over the past couple of years, consulting with government on the Insurance Regulations and to establish a marketing strategy to keep the positive aspects of the Cayman Islands as a the foremost jurisdiction to conduct business recognising Cayman as the world’s most complete financial centre.

IMAC in conjunction with representatives of government will attend the upcoming American Society of Health Risk Management (ASHRM) conference in Phoenix, Arizona in October, to ensure Cayman remains the domicile of choice for the industry sector. Cayman boasts over one-third of its 735 captives licensed as Class B companies being health care related which makes Cayman the leader by a wide margin.

Marketing is a key objective for IMAC for its upcoming 2011/2012 fiscal year as it seeks to implement its marketing strategy as a “rolling thunder” of information both within Cayman and beyond its shores.